TECHNOLOGY

Federal Regulators Approve Comcast/NBCU Deal

By David Hatch

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The historic Art Deco-style sign sits above the entrance to NBC Studios in New York City.(Chris Hondros/Getty Images)

Updated at 2:14 p.m. on January 18.

Federal regulators today approved the $30 billion combination of Comcast and NBC Universal with extensive conditions designed to protect consumers and competitors, paving the way for a media juggernaut that could reshape television in the Internet age. The Federal Communications Commission and the Justice Department approved the transaction, which was announced on December 3, 2009, and has generated intense lobbying in Washington.

The FCC’s decision was backed by two Democrats, Chairman Julius Genachowski and Commissioner Mignon Clyburn, and two Republicans, Robert McDowell and Meredith Atwell Baker, on the five-member commission. The fifth commissioner, Democrat Michael Copps, was the lone dissenter, arguing that the conditions are not sufficient to safeguard consumers and competitors.

“The conditions include carefully considered steps to ensure that competition drives innovation in the emerging online video marketplace,” the chairman insisted in a statement. He said that the deal is structured to spur broadband adoption and access and “increase news coverage, children's television, and Spanish-language programming.” But Sen. Al Franken, D-Minn., a fierce critic of the deal, expressed “tremendous” disappointment. “What we see today is an effort by the FCC to appease the very companies it’s charged with regulating,” he complained in a statement. “This will ultimately mean higher cable and Internet bills, fewer independent voices in the media, and less freedom of choice for all American consumers.”

The new Comcast could play a critical role in shaping how Americans access video via the Internet, because movies, television shows and short film clips are increasingly distributed online. It will be the nation’s largest provider of cable television and residential broadband service, with assets that include Universal Studios, NBC, MSBNC, CNBC, 10 TV stations reaching 27 percent of U.S. household , 234 affiliated NBC stations, 10 regional sports networks and dozens more cable networks and websites.

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It also will be the nation’s third-largest residential phone service provider and the owner of Telemundo, the nation’s second-largest Spanish-language network and its 16 TV stations. NBCU parent GE will retain a 49 percent stake in the new company.

The joint venture has been a lightning rod for controversy, uniting onetime adversaries in opposition to a transaction that critics warned would give the new enterprise too much control over the media and the Internet. Critics have raised worries that Comcast would squash a growing array of nimble online competitors and undermine program diversity. To address those concerns, the FCC took steps to make Comcast’s content available to competitors and its platform accessible to independent producers.

Sweeping network-neutrality rules adopted by the FCC on December 21, 2010, would prohibit the new company from blocking or degrading a growing array of ventures that offer competing online video services. Under a special agreement unveiled today, if the new rules are overturned in court, Comcast would still have to abide by them for seven years.